Drapac targets US recovery

Melbourne property veteran
Michael Drapac
is launching two funds to tap into the pent-up opportunity emerging as the US real estate market recovers.

Well-known in Melbourne, Mr Drapac made money riding the upside of the Melbourne market as it roared back from the collapse of the early 1990s.

Now he is applying a classic counter-cyclical thesis in the US market where housing starts have been at historic lows and property prices remain severely depressed.

It is that combination which provides the ingredients for an outperformance, the Drapac analysis says.

The proposition is not for the faint-hearted. It’s an opportunistic, value-add play that could generate significant upswing for investors as Mr Drapac realises the better values from properties acquired on the cheap.

He is not alone in his bullish outlook. Legendary US investor
Warren Buffett
has made a big play in the past year, buying real estate brokerages in expectation of a housing recovery.

“All the gross macro numbers about America are extraordinarily compelling," Mr Drapac said in Melbourne this week.

“The American property industry is starting to normalise. It has turned the corner well and truly.